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IATA: Global Airlines' Margin Will Only Be 2.4% in 2014

6/02/14 3:42 PM EDT
Airlines may be seeing record earnings, but the margin is alarmingly low. According to International Air Transport Association's latest forecast, the airline industry's margin for 2014 is only going to be 2.4% or $5.42/passenger. That's calculated on a revised down sales of $746B. The industry did come a long way since the troubled years. Carriers as a group are expected to net $18B in 2014, up 70% versus 2013. North American operators are doing the best. Together, they expect a net income of $9.2B, which is more than 50% of the global grand total. Profit on a per passenger basis is expected to be $11.09, which is more than triple of what it was just two years ago. Carriers outside of North America might see more setbacks going forward. Rising fuel costs, economic uncertainties, and even natural disasters and outbreak of disease can all make the profits go away. IATA also said the industry is particularly exposed to China.
Stocks in this video: XAL
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